The Impending NHL Lockout — What You Need To Know

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As the dog days of summer get into full swing, most hockey fans are counting down until training camps and preseason openers. Some NHL teams are even still putting the finishing touches on their roster for opening night, which is just 9 weeks away. Fans are planning trips to games, purchasing season ticket packages and buzzing about their teams’ summer acquisitions. Especially anxious are the fans of the Detroit Red Wings, who will host the 2013 Winter Classic at Michigan Stadium in Ann Arbor on New Years Day against the Toronto Maple Leafs. All this sets up a fantastic 2012-13 season for NHL fans everywhere.

But wait…

All this planning, buzzing, and anxiousness could be put on hold. Yet again, the players and the league are headed for another labor dispute. No, it’s not a broken record. And yes, you have heard this before. Back in the summer of 2004, right after the Tampa Bay Lightning won the franchises first Stanley Cup Championship, the NHL locked out its players for the entire 2004-05 season. It was the first time since 1919 that the Stanley Cup had not been awarded, and the first time a major North American sports league cancelled an entire season due to a labor dispute. Back then the dispute was mainly over the salary cap. The owners/league wanted one. Understandably, the players did not.

Fast forwarding to 2012, the Collective Bargaining Agreement (CBA) is set to expire on September 15th, and with training camps starting up about a week after that date, it looks as if the 2012-13 season will not start on time. The Red Wings normally head up to Traverse City and hold a prospect tournament in early September that includes them as well as a dozen other teams. This event has already been cancelled for 2012. And as the time goes on, you can count on more preseason events being cancelled.

NHL Commissioner Gary Bettman and his group of 30 owners are threatening to lockout the players if a new CBA deal cannot be reached by the September 15th deadline. (Getty Images)

Unlike the 2004 lockout where many fans sided with the league, most seem to be siding with the players this time around. Briefly, here is what the NHL proposed to the players union in mid-July:

1. Players revenue share is reduced from 57% to 47% — That amounts to about $300 million dollars the owners are asking the players to take a cut on. This is like an opening sucker punch to the face. Currently the salary cap is around $70 million, and with this plan, the league is asking for it to be reduced back to around $50-55 million. Essentially, each player’s contract would be cut around 20% from what it currently is right now. The owners want the shared revenue system to go up in amount. But the players see this extra sharing as being funded by what they would be losing, instead of big markets (Toronto, Detroit, Chicago, Boston, NYR, Pittsburgh) helping out the small markets (Florida, Columbus, Nashville, Carolina, Islanders). This is probably the biggest issue and the one where the NHL and the NHL Players Association (NHLPA) are furthest from, and the cornerstone of getting a deal done.

2. 10 years until a player can become an unrestricted free-agent (UFA). — This issue isn’t as big as revenue sharing but nonetheless it will matter to the players. In the current format, players who have reached age 27, or have 7 years of NHL experience, whose contracts have expired are “free agents”. The NHL has proposed that that length be extended to 10 years. To clear up what is defined as a “free agent”… http://en.wikipedia.org/wiki/NHL_salary_cap#Unrestricted_free_agency

3. Contracts will have a 5-year limit on them – So those new deals Zach Parise & Ryan Suter signed with Minnesota? And the deals Sidney Crosby and Shea Weber made with the Penguins and Predators? Even the deal Johan Franzen signed with the Red Wings? Those will be a thing of the past if the owners get their way. General managers have gotten smart over the years and figured out that if you front load a players contract and throw a few nonsense years on at the end, the players salary cap hit will be much lower. For example, players can be given contracts which pay them top dollar in the first few seasons (when they are producing greatly), and then pay them a lot less towards the end of the deal. Since the salary cap only takes into account the average cap hit of the contract, players and GM’s can save the team some salary cap space. A great example of this is when the NHL put a halt to Ilya Kovalchuk’s ridiculous 17-year, $102 million dollar deal because it was too front loaded. A player’s cap hit will be the average salary of every season in the contract up to the year after he turns 41. In the following years, the actual salary for that season will be the player’s cap hit (not the average). This is known as the Kovalchuk Amendment, and it could be simplified if the NHL has their way.

4. No more salary arbitration -- Every year there seems to be an awkward moment when a restricted free agent will try to get more money because he thinks he had a stellar year and should be paid like a top player. Which is a smart move for him, but requires the team to fork over more money. These days, not many players end up in salary arbitration. However, this combined with the 10-years until a player can become a UFA proposal wouldn’t sit too well with the players. Not all players make it past 10 years in the league and would want to know their financial future is secure.

5. Entry level contracts would be extended – In the current system, most rookies sign a 3-year “rookie deal” with a team. Extending that entry level deal to 5 years would be a big swing in the league/owners favor. Rookie deals are great for the team and the salary cap because rookie’s basically have no negotiating power and their salaries are capped at around $1-2 million. Good for everyone, except the player who produces at a young age and thinks he deserves a better deal.

6. No more signing bonuses -- This is fairly self explanatory, but owners seem tired of shelling out big dollars as bonuses. Players won’t like this too much.

7. Salary must be the same for every season of contract – Like I stated earlier in #3, many contracts are front loaded so a players annual salary cap hit is lowered from what a team is actually paying him. In this proposal, a team would have to pay a player the same amount in the first year and the last year of his contract. Every year must be the same. The owners and GM’s are actually saving money this way because they wouldn’t have to pay the majority of a players contract in the first few years of a long-term deal.

8. The salary cap ceiling will be $4 million above the mid-point, and the floor $8 million under the cap — Basically, this will trim the gap between big spending teams and teams that tend to remain close to the salary cap floor.

So there you have it! 8 HUGE proposal’s and changes that the NHL wants to implement. All this coming 7 years after they changed everything the first time around. In my opinion, it’s a slap in the face to the players. The players had to change and gave up so much in 2004-05 and now the NHL wants them to change and take a hit once again.

Last Wednesday, the NHLPA responded the NHL’s proposal with an alternate proposal of their own. All the above proposal’s were not addressed however, which leads me to believe we’re in this for the long haul. The two biggest players in this fight are NHL Commissioner Gary Bettman and NHLPA  executive director Donald Fehr. Bettman has been an enemy of the fans for as long as I can remember. The players obviously can’t stand him, but no player would ever come out and admit that. You’ll hear those two names plenty in the coming weeks and months.

It’s pretty clear that the 2012-2013 NHL season will NOT start on time. With the issues yet to be discussed and the lack of time until training camps, it looks as if fans will have to endure another Fall without the start of hockey. However, it’s important to both the players and the league that another entire season isn’t lost like the one in ’04-’05. Cancelling the upcoming season would be devastating to the sport and a league which already ranks as the 4th most popular of the 4 major pro sports leagues in North America. You can bet players will jet to Europe and Russia to play in leagues that have a more certain and stable future. 2012 1st overall pick Nail Yakupov has already come out and said he’ll play in Russia if there’s a lockout.

Prediction: Knowing that the NHL can’t afford another year-long lockout, but keeping in mind the limited time frame and number of issues, I’m going to go out on a limb and say the 2013 Winter Classic will be the first game of the season. Much like the NBA did last year, the NHL will need to scramble to put together a season that would last around 50 games instead of the normal 82. Starting the season with an event like the Winter Classic would be some good PR for the troubled league. So, book your tickets now for the Griffins, Spartans, Wolverines, Broncos, Bulldogs and Whalers. This NHL season is without a doubt hanging in the balance.

Thanks to Rob Benneian for his help in this report.

Posted by Jeff Deacon on 5:46 pm. Filed under Detroit Sports, Detroit Tigers, Hot News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.